The State of California ran out of cash in July and used “script” to pay its bills. State employees, third party vendors and service providers received pieces of paper that look like checks as payment of wages and invoices. Although called “script,” and “California IOUs” the papers are more properly called “warrants.”
Warrants are one official instructing another official to do something within their authority as officials. An arrest warrant is a judge telling a law enforcement officer to take someone into custody. The California warrants are the state controller telling the state treasurer to pay money on a particular future date. In this case the date is about two months in the future.
Some California banks, Wells Fargo and Bank of America are the most prominent examples, accept the warrants for deposit into checking and savings account. Some banks are accepting the warrants but discounting the face amount of the warrant by two or three percent. The discount represents an interest charge by the bank for the time the script is unpaid by California.
The California script is due on October 2, 2009 and carries an annual interest rate of 3.75 percent.
Speculators are offering to buy the script at discounts on Craigslist. There are internet exchanges where holders of the warrants can offer them for sale. One of these exchanges is the creation of Brandon Schlichter who is a resident of Columbus.
Does this California script have any value in Bexley? Will Bexley restaurants and other retail establishments accept the California script as a form of payment. To find out Bexley Public Radio called three Bexley restaurants: The Top, Bexley Monk and Guiseppes Ritrova. Bexley Public Radio also posed the question to the home offices of Walgreens and CVS, two national chain drug stores serving the Bexley community. Both Walgreens and CVS have retail stores in California.
The manager at The Top Restaurant said unequivocally that they “can’t accept” the script as payment.
The host at Bexley Monk left the question open but said that none of the California script had been presented and then, as an after thought, said that he didn’t think it was likely that anyone would offer the script as a form of payment. We take this response as a polite “non.”
The position of Giuseppe’s Ritrova was also unequivocal about the California script. The host said that “we won’t accept it.”
As to the drug stores, emails were sent to the home offices asking whether California script would be accepted in payment for purchases at the East Broad Street Walgreens location and the East Main Street location of CVS.
Neither home office has replied to the email. After five days of no response, we are taking the silence as “no.”
CONCLUSION. California script has zero value in Bexley.
The credit score of California seems to be below one hundred and fifty points in our Midwestern paradise.
This is Laura Franks reporting for Bexley Public Radio.
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Design is copyright 2009. All rights reserved. Bexley Public Radio Foundation. Text is copyright 2009. All rights reserved. Laura Franks.
1 comment:
Jct: There’s nothing wrong with small denomination municipal or California State IOUs if anyone can pay their taxes with them. When Argentina’s government workers were faced with cuts, their unions talked 6 state governments into paying them with small-denomination state bonds which could be used to pay for state services and taxes by everyone.
When the local currency is pegged to the Time Standard of Money (how many dollars per unskilled hour child labor) Hours earned locally can be intertraded with other timebanks globally! In 1999, I paid for 39/40 nights in Europe with an IOU for a night back in Canada worth 5 Hours.
U.N. Millennium Declaration UNILETS Resolution C6 to governments is for a time-based currency to restructure the global financial architecture.
See http://youtube.com/kingofthepaupers on growth of the international time-trading network.
Too bad California IOUs won’t be accepted in payment for state taxes and services like state bonds were in Argentina. Too bad California IOUs will be denominated too big to use as local currency. Too bad Argentina people were smart enough to avoid the tent-cities catastrophe and California people are too stupid to follow their example.
If they make IOUs legal tender, I'll take back every joke I ever made about Girlieman Governor Musclehead if he engineers the California state currency lifeboat.
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